Shanghai Electric Power (SEP) has terminated its long-awaited plan to acquire a majority stake in K-Electric (KE) for $1.77 billion, citing regulatory hurdles and shifting market conditions in Pakistan.
The proposed deal, first initiated in 2016, aimed to transfer 66.4% of KE’s shareholding—18.3 billion shares held by KES Power Ltd—to SEP. The Chinese company also pledged up to $27 million in performance-linked incentives.
However, in its official notice to the Shanghai Stock Exchange, SEP confirmed that the counterparty consistently failed to meet preconditions. It further noted that Pakistan’s changing business environment no longer aligned with its international expansion strategy.
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The Board of Directors of SEP approved the termination on September 9, 2025, through a formal resolution, stating that the decision would not adversely impact its global operations or shareholder interests.
The collapse of the deal is seen as a blow to Pakistan’s struggling power sector, which has long awaited fresh capital infusion for infrastructure and grid modernization. Analysts say KE’s inability to finalize the transaction raises concerns about foreign investment prospects in the country’s utilities sector.
